Chester crunching numbers on 2013 budget

CHESTER -- Councilman Nafis Nichols said Wednesday he is working with city officials to finalize the city's 2013 preliminary budget in time for the next city council meeting.

Nichols, the city's director of accounts and finance, said city officials are examining new revenue streams and pursuing cost-savings measures needed to pass a balanced budget in which expenses continue to rise, especially in regard to police and fire department costs.

Nichols added that the city likely will finish 2012 with a deficit. However, he said measures passed by council to recoup delinquent taxes earlier this month make estimating the deficit difficult.

"We have to be realistic about it, we're going to have a deficit," Nichols said. "We're going to have to shave in some areas. It's something that's normal in government, to have a deficit.

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"But I have to be fiscally responsible as the director of accounts and finance and I have to be realistic."

To aid the city's finances, council passed an ordinance Wednesday authorizing a $12.85 million general obligation note, which Nichols said will provide about $1 million to the city's general fund in 2013 and another $930,000 for capital improvements. He said the bond also enables the city to regain ownership of City Hall.

Nichols added that city officials learned Wednesday that Standard and Poor's had again given Chester an A credit score.

Nichols said the city officials are exploring a number of potential revenue streams that will help cover rising expenses, including increased service fees, an employee time-clocking system and instituting amusement and parking taxes.

Mayor John Linder said city officials are not looking to raise real estate taxes, but that the city must re-examine amusement and parking taxes proposed earlier this year.

The proposals, which sparked the ire of affected businesses, would levy a 10 percent amusement tax and a 20 percent parking tax. The taxes primarily would affect PPL Park and Harrah's Philadelphia Racetrack and Casino.

"The issue, I think, for the most part has been trying to work with our community partners, the business community," Linder said. "But at this point, there are some mandates on us as a council and we're mandated to look at every revenue stream. This is not unusual and, at this point, it's just a matter of how much and when to implement it."

Nichols added that city officials are having "a detailed conversation about it" and he believes council is "on the same page."

Nichols said city officials also are examining increasing various service fees in an effort to make rates comparable to other county municipalities. He said the city might purchase a time-clocking system for its employees, which in some municipalities has cut employment costs by as much as 16 to 19 percent within a year.

Nichols said the city also wants to partner with various businesses to host events in which the business covers certain costs in exchange for publicity.

Nichols said city expenses continue to rise, particularly among police and fire costs. Both the police and fire unions were awarded costly arbitration packages in the last 12 months that the city must finance. He said the fire award, which included both retroactive and future pay increases, cost the city an additional $2.4 million.

Nichols said balancing the budget requires creativity throughout the city government.

"A lot of the budget is fixed costs," Nichols said. "I can't change the health insurance rate. I can't change what you pay employees. I have to pay PECO or there won't be any street lights."

Linder said they have asked department heads to be cautious spenders.

"We're asking everyone to be sober on their thinking of what needs to happen, to make sure we have a real balanced budget going forward," he said.

Linder and Nichols said city officials also will be unveiling a five-year financial recovery plan drafted by Fairmount Capital in accordance to the city's Act 47 financially distressed municipality status.

"The recommendation portion of it is to say that if you implement these recommendations ... you can start to look at some surpluses instead of deficits," Nichols said. "That's if we incorporate each and every recommendation, which is very aggressive, and it takes a collaborative effort to do so."

Chester has been under Act 47 for several years and last adopted a recovery plan in 2006. Linder said Chester must work to get out of Act 47, which provides various benefits, and become self-sustainable.

"Where we stand now, we're on a good track to get out of it," Linder said. "We've got other things emerging that will continue to help us. It's just good budgeting and good money management."